China takes clean energy lessons from Portugal's EDP

China Three Gorges is expanding a foothold in clean energy in Portugal, where it has been the biggest shareholder in Energias de Portugal, a local utility company, since 2012.

CTG, a Chinese state-owned energy company, bought 49% of EDP's share of Portugal's largest wind farm cluster for 248 million euros ($290 million) at the end of June, and is planning further investments, largely aimed at helping China to gain technological know-how.

The wind farms, which produce 422 megawatts a year, are the latest in a string of deals that have followed CTG's acquisition of a 21.35% stake in EDP in a 2.7 billion euros deal.

The agreement also established a strategic partnership between the two companies, including a deal to invest an additional 2 billion euros in joint investments -- which has largely involved asset sales by the highly-indebted Portuguese utility.

CTG has bought 50% of EDP's hydropower business in Brazil, as well as stakes in wind farms in Italy, Poland and the U.K. The two companies agreed last year to pursue further joint investments worth 1.5 billion euros.

"Chinese companies are not sleeping on the job," said Jorge Maia Alves, a leading researcher in clean energy development in Portugal, and vice dean of the Faculty of Sciences at the University of Lisbon. "EDP is one of the companies with more wind assets in the world. And we've come a long way in developing know-how."

Through its renewable energy unit EDPR, EDP is the third largest wind power producer in the world, with more than 9 gigawatts of global installed capacity, about half of which is in the U.S. It also owns assets in seven other European nations, Mexico, Canada and Brazil.

CTG entered Portugal during what Maia Alves called "an energy revolution." "We've gone from asking if we could rely only on renewables to now asking how are we going to manage them," he said.

Portugal has one of the highest rates of renewable energy penetration in Europe, running for four days last year solely on clean energy sources. The challenge of managing distribution and transmission grids is prompting industrial and scientific innovation.

Antonio Sa da Costa, president of the Portuguese Renewable Energy Association, says Portugal is a “test lab for China.”

Portuguese clean energy production exceeded demand for more than one-tenth of last year. "Even Germany [another European leader in green energy] can't do that," said Antonio Sa da Costa, president of the Portuguese Renewable Energy Association. He added that Portugal is a "test lab for China."